Investing in Mobile Homes

My wife and I have managed a small mobile home park since January of 2000. When done right owning a mobile home is a cash cow. 

Terminology: Manufactured Homes can include single or double wide structures. However, the tongue and road wheels of manufactured homes are frequently retained by the manufacturer after delivery and installation. Mobile homes are usually single wide and hopefully still have the road wheels and tongue and can be moved in an emergency. Trailer is frequently used for both, but should be limited to something readily towable by your family station wagon.

Insurance: Mobile homes should be insured with a mobile home policy. UNLESS, they are permanently attached to the realty. If permanently affixed to the realty you probably need a standard rental dwelling policy.

Flood: A mobile home policy may cover flood damage if the mobile home can be towed out of a disaster zone. Check with your agent.

Mobility: To be mobile the mobile home should still have the tongue either attached or stored underneath and have the road wheels and axles underneath as well. Road wheels are like truck tires. They dry rot over time.

Titles: Manufactured homes and mobile homes have a title just like a car. Double wides frequently have two (2) separate titles, one for each side when shipped.

Taxes: In Illinois, a mobile home is subject to Personal Property Tax. The land it sits upon is subject to real estate tax. Check both of these out with the county to make sure there are no liens on either.

Tax Release Letter: In some counties you need a certified letter from the county collector showing the personal property taxes are paid. Once you have the letter you can take the title to a license and title service. This is not a title company for real estate. Think car title. You need the letter to apply for a new title. In this county that cost was $10.00 about one month ago.

Holding Title: Since this is personal property consider using a personal property trust to own it. The trust should have a PO Box mailing address for privacy reasons.

Recently, a personal property trust I am trustee for bought a 1968 Baron two bedroom single wide mobile home. The trust paid $1,900.00 for this antique. However, the prior owner was a grant application specialist. She got the grants department to pay for about $20K in improvements over the last 4 years. Furnace and AC are "ONLY" four months old.

Building Materials: Many items in a mobile home are custom purchases or must meet more stringent requirements to be permitted. Water heaters must be specific for mobile homes or you will need to take it out and replace it. Gas water heaters designed for mobile homes are frequently vented up from the floor and out through the roof.

Contractors: Frequently contractors overcharge to work on mobile homes because no one else will. Contact local mobile home parks and find out who they use.

Tax Advantage: Personal Property Taxes are minimal on older mobile homes.

Permanently Affixed: Some mobile homes are installed on a permanent foundation. These can be a concrete block crawl space or basement. I have never seen a Mobile Home permanently installed on a slab. If permanently installed it may be subject to only real estate tax.

Recommended Reading: "Deals on Wheels" part 1 and 2 by Lonnie Scruggs. I bought his course years ago and it is still relevant.

Inspection: You should have the home your looking at inspected by a qualified building inspector. Make sure they understand mobile homes before hiring them. Do your "Due Diligence" on the inspector before hiring them.

Mobile Homes can be cash cows or money pits. Check them out before jumping in.

Good Luck and Good Investing